Which of the Following Is Not True? Choose One)

question 4

Multiple Choice

Which of the following is not true? choose one)

• A) There is a payoff when the nth default occurs in an nth-to-default CDS.
• B) An add-up basket CDS provides a payoff when any of the reference entities defaults.
• C) The CDS spread on a first-to-default swap decreases as the default correlation between the reference entities in the basket declines.
• D) The payer in a total return swap suffers a loss if the receiver defaults when the reference bond's yield has increased.

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Definitions:

Durkheim

A French sociologist, social psychologist, and philosopher who is best known for his works on social cohesion, the division of labor, and the concept of anomie.

Restorative Justice

A system of criminal justice that focuses on rehabilitating offenders through reconciliation with victims and the community at large.

Retribution

A principle of justice where the punishment of a criminal is proportionate to the offense committed, emphasizing the aspect of moral vengeance.

Revenge

The act of inflicting harm or punishment on someone for a wrong they have done.